Weekly Market Update - 8 May 2023
Electric Vehicles In Vietnam
The richest man in Vietnam is doubling down on a huge bet on electric vehicles, despite a road lined with failed competitors and few sales to show for $8 billion. Tycoon Pham Nhat Vuong has lined up another $2.5 billion for automaker VinFast, which filed for an IPO a year ago, but has now delayed plans to list in the US. So far the return on all that investment has been meager: VinFast has sold just 93,000 vehicles and 162,000 e-scooters. This month, the company plans to start delivering longer-range versions of its VF 8 sport utility vehicles to US customers. But it’s unclear how quickly those SUVs will catch on in an increasingly cutthroat market, shaken up by Tesla price cuts.
Source: Bloomberg
Back In The Black?
Australia may record its first budget surplus in 15 years, bolstering the government’s economic credentials as Treasurer Jim Chalmers moves to reinforce the central bank’s efforts to peg back inflation. Local media report the government will deliver a slim surplus amid windfall revenue from high export prices and a bigger income tax take. Typically, a budget surplus in Australia is a political victory for the government as it indicates strong economic oversight. But with inflation running at 7% and interest rates rising at the fastest pace in 30 years, bringing fiscal policy in line with monetary settings is crucial to cooling prices and easing pressure on a struggling electorate.
Source: Bloomberg
Weak Demand
China’s largest trade fair was meant to be a triumphant return for the world’s biggest manufacturing nation after three years online. Instead, the mood at the vast convention center that hosts vendors of goods from toys to electronics was downbeat as factories grapple with a slowing global economy and a scarcity of US buyers. The semi-annual event known as the Canton Fair, which kicked off on April 15 and ended Saturday, saw $25.1 billion in transactions agreed — well below 2008’s peak of $38 billion or the pre-pandemic level of $30 billion in 2019.
Source: Bloomberg